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German transport minister ready to welcome Uber by 2021

Germany's transport minister has said he wants to ease rules on car-pooling companies such as Uber. The US company has failed to take off in the country — its freelance driver-based model runs afoul of existing laws.

German Transport Minister Andreas Scheuer wants to open the German market to car-pooling services offered by Uber and other companies by 2021, Germany's Focus magazine reported on Saturday.

Services offered by Uber and other companies could help provide critical services in rural areas, Scheuer told the magazine.

The transport minister said he wanted to change existing laws to allow such service providers to operate in Germany.

"We can create new possibilities, especially in rural areas and for older people, with car services and pooling systems," said Scheuer, a member of the conservative Bavarian Christian Social Union. "That is a giant opportunity."

Uber, valued at about $70 billion (€61 billion), has failed to take off in Germany, where its freelance driver-based model has struggled with existing laws. Currently, only taxi drivers licensed by local authorities are permitted to accept contracts from individuals.

"I'm against bans and limits. I'm for incentives," Scheuer told the magazine. "We can't just exclude a service provider."

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Death by Uber

Death by Uber

Reforming laws

Scheuer's ministry has been working on reforming passenger transportation laws. It was not immediately clear if allowing car-pooling services is part of the ongoing reform process.

Uber, which is active in more than 60 countries, faced legal battles with taxi drivers and city authorities when it first made its foray into Germany in 2014 — as it has in other countries, as well. Its business model of using unlicensed cab drivers was ruled illegal by a German court. Uber has also faced similar bans in several other European cities.

Currently, Uber's app offers rides with licensed taxi drivers in Berlin and Munich. The company aims to have a presence in every major German city by 2020.

The company, which is facing stiff competition and regulatory troubles in its key US and Asia markets, is eager to make it big in Germany. It's working with licensed private car services, which act as subcontractors for Uber.

Uber: The highs and lows of the ride-hailing superstar

Ride-hailing first tested in US cities

In July 2010, Uber went live for the first time in San Francisco before spreading to other American cities. It quickly grew into a global operation, and today offers ride-hailing services in 600 cities. Along with Airbnb, Uber has seized on the rise of smartphone apps to power the sharing economy. But its huge growth has been met with fierce opposition from regulators and traditional taxi firms.

Uber: The highs and lows of the ride-hailing superstar

Loved by users, hated by officials

Considered a godsend by many consumers, Uber was accused by licensed taxi drivers of circumventing costly transport regulations to undercut them on price. As the ride-hailing app expanded around the world, so did resistance to its attempts to overtake existing taxi operators. Protests and strikes broke out in dozens of cities, including one in Paris, France, where an Uber vehicle was overturned.

Uber: The highs and lows of the ride-hailing superstar

China venture backfired

Protests were not the only opposition to face Uber when it launched in China in 2014. Having made its name by offering low prices, it struggled to make inroads in the world's second largest economy, and eventually sold out to a well-connected local competitor, just as the Beijing government loosened the regulatory burden on ride-hailing apps. The failed venture cost it some $2 billion.

Uber: The highs and lows of the ride-hailing superstar

Regulators get tough

At least nine European countries have banned or restricted Uber's operations, including Germany. The firm was forced to rework its business model after facing the ire of French regulators. In December 2017, the European Court of Justice ruled that Uber can be regulated by member states as a taxi service and not, as it argued, as a digital service provider, connecting consumers with drivers.

Uber: The highs and lows of the ride-hailing superstar

Not 'fit and proper'

Regulators in London have terminated Uber's license to operate, citing irregularities in screening drivers and reporting serious criminal offenses. The firm is appealing. Amid complaints of labor rights violations, a British labor court ruled in November 2017 that Uber's drivers are employees – and therefore not self-employed – and ordered the company to pay the minimum wage and cover paid leave.

Uber: The highs and lows of the ride-hailing superstar

Bro culture comes unstuck

In June 2017, Uber CEO and co-founder Travis Kalanick stepped down after its corporate culture came under scrutiny. While the company faced accusations of dishonesty from global regulators, female employees complained of sexual harassment and an overall sexist and hostile culture at the San Francisco-headquartered firm. After an internal investigation, Uber launched a sweeping reorganization.

Uber: The highs and lows of the ride-hailing superstar

Drivers to be phased out

Despite the controversies, Uber continues to expand. It now offers car-pooling and food delivery services in several cities. In 2016, it tested the first driverless vehicles in the American city of Pittsburgh. It plans to introduce some 24,000 self-driving cars between 2019 and 2021 although drivers will still sit at the steering wheel, monitoring the vehicle.

Uber: The highs and lows of the ride-hailing superstar

Uber takes to the skies

Uber faces even more legal and regulatory hurdles for its next venture, which will allow riders to beat urban traffic jams by booking flying cars that will pick them up from skyports on roofs of office blocks. Dallas, Dubai and Los Angeles have given the go-ahead, involving aircraft that look like a cross between a small plane and a helicopter, with fixed wings and rotors. (Author: Nik Martin)